CO2 Shortage Risks Empty Supermarket Shelves, Warns Labour
Labour has warned that the government is "sleepwalking" into another national crisis amid concerns that a drop in CO2 supplies could soon lead to gaps on supermarket shelves.
CO2 plays a vital role in the UK food and drink industry and a fall in supplies risks severe disruption to supply chains that are already under huge pressure from rising inflation.
It is used in product packaging, fresh food delivery, and adding fizz to soft drinks and beer. It is also used by farmers to humanely slaughter animals before they enter the market.
The UK industry is on high alert after US company CF Industries announced last week that soaring energy costs had forced it to pause operations at its fertiliser plant in Billingham in the northeast.
CO2 is a by-product of fertiliser production and the UK gets over 40 per cent of its CO2 from the firm.
The Department for Environment, Food and Rural Affairs (Defra) is holding regular meetings with industry groups to discuss how to mitigate a potential CO2 shortfall in the coming weeks, PoliticsHome understands, amid concerns about food disruption and risks to animal welfare.
The government struck an emergency deal with CF Industries late last year in which it agreed to pay the firm for the CO2 it produces to avoid widespread disruption. However, soaring energy costs, driven by Russia's invasion of Ukraine, has prompted the firm to halt production once again.
Shadow Environment, Food, and Rural Affairs Secretary Jim McMahon told PoliticsHome that it was another example of ministers being "behind the curve".
“The supply of CO2 is vital, given its use in the production of food and drink and to extend the shelf life of meats, salads and bread, but a government that’s yet again behind the curve, has left us vulnerable to further sharp food price increases and shelf gaps," said the Labour MP.
“Labour has repeatedly warned for the need to get ahead of the crisis, and the government needs to get around the table with food producers to develop practical solutions that prevent further government inflicted chaos.”
Shadow Defra minister Daniel Zeichner wrote to the government last week following the CF Industries announcement but had not received a response at the time of writing.
Richard Griffiths, Chief Executive of the British Poultry Council, said that while there were currently sufficient CO2 supplies, it could become a major problem "very quickly".
“At the moment we are not having shortages but as an issue it’s bubbling under the surface and could rise to the top of the agenda very quickly," he said. “The important thing for us is to keep that supply chain moving and when it slows down or breaks, that’s where we see real problems."
He added that any action the government can take in the event of a shortage is limited because as things stand there is no alternative source of CO2 that can make up the shortfall.
“The advantage of having been through this before, in 2018 and again last year, is that we have an established priority list, and government can move to reiterate that," he said.
If there is national shortage of CO2, the government will prioritise making sure it reaches the nuclear industry, the National Health Service, and food production, PoliticsHome understands.
“Beyond that, however, it’s very difficult to solve as it’s a marketplace," Griffiths said.
"The majority of CO2 we use in this country is a by-product of fertiliser production, and that’s just a fact. There is no government lever to be pulled.”
Kate Halliwell, Chief Scientific Officer at the Food and Drink Federation (FDF), said that the trade body was "increasingly concerned" about CO2 supplies through the autumn and the potential impact on the food and drink supply chain.
"It seems highly likely Billingham will cease production around the same time as the Ensus plant will be closed for routine maintenance meaning for most of September, UK Food and drink manufacturers will be dependent on European imports, which are themselves unstable," she said.
"This only adds to the enormous pressures food companies are facing this autumn, from soaring energy prices, volatile exchange rates, rising ingredient costs and stubborn labour shortages.
"Urgent action is needed to address these issues and we stand ready to work with the new government on ways in which we can do this.”
A government spokesperson said: “We are aware that CF Fertilisers has taken the decision to temporarily halt ammonia production Billingham. Since last autumn, the CO2 market’s resilience has improved, with additional imports, further production from existing domestic sources and better stockpiles.
“While the government continues to examine options for the market to improve resilience over the longer term, it is essential industry acts in the interests of the public and business to do everything it can to meet demand.”
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